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[Beginning of
Cramer's
verbatim
comments for
this segment...]
Jim:
Let me be very clear
here... I don't
believe
Citigroup (C)
should just do
whatever the heck it
wants... I don't
think it should be
able to boost
salaries by 50%, in
a way to get around
the problematic
bonus issues... even
if it is the alleged
rank and file who
will benefit. And
you know that's a
canard... because
it's the traders and
investment bankers
who will be the
winners... and
they're hardly rank
and file. They're
the heavy hitters,
for heaven's sake.
Now I don't mind
going from
outrageous bonuses
to legitimate salary
plans for those
banks that have
already paid back
the TARP money
they've borrowed
from the government.
Frankly, as long as
the risk takers'
interests are
aligned with the
banks that have
repaid TARP from
long-term
incentives... I want
long-term
incentives... I'm
cool. But not for
the bank that we,
the taxpayers, own
34% of. We can't let
them do whatever
they want... that's
not right... not
Citigroup.
Now I understand
that Citigroup has
to keep good
people... I heard
that all day. And
they have a right to
pay them
something... a
little more, maybe?
I don't know. I
don't see anyone
else getting bonuses
this year. I don't
see anybody getting
pay increases.
I think what they
should do, if
they're having such
a hard problem, is
give them long-term
vesting registered
stock units, and
definitely not with
options dilutive to
the taxpayers. And
certainly, I never
want to hear about
re-pricing of
options which I
think should be
illegal for anyone,
just in case they
were even thinking
of going down that
outrageous path.
But let's be
honest... Citigroup
has been, by far,
the most problematic
of the banks... and
you can argue that
it should be in a
General Motors
situation if it
comes back for more
money... meaning the
President should
just replace the
CEO, and bring in
someone who can
figure this darn
bank out. And I say
that as someone who
thinks current CEO,
and one time
Wall of Shamer,
Vikram Pandit, is
actually doing a
decent job, having
been dealt the
single-worst hand of
any banking
executive out there.
Remember, he didn't
build this shaky
edifice... His
predecessor, Chuck
"the clown" Prince,
did... He's cost us
a fortune.
It is clear that
Pandit should have
raised more money
when he had the
chance, and that
he's been one step
behind the banks'
short-selling posse
the whole way.
Given the fact that
the government
already owns 34% of
the company... but
it doesn't have a
seat at the board...
you can expect
Citigroup to do
silly things like
sneak pay
packages... you
know, these new
raises that we had
to learn about in
the New York Times
this morning... You
know... hello...
that's what happens
when your biggest
shareholder, by far,
doesn't have a voice
in the day-to-day
operation of the
company, and doesn't
even seem to desire
one...
Perhaps the pay
packages should have
been worked out with
Treasury
(Department)
maybe... so the
people who take the
most risk are given
long-term
incentives, not
short-term ones...
because that's what
got us in trouble...
short-term rewards
for long-term risks.
What do I want?...
Rather than just
pure rhetoric, let
me actually offer a
plan that I think
they should do...
Tim Geithner, here's
what you should
do... You should
tell them look, we
want a two-tier pay
plan... small
incentives for those
good people who
don't take risks,
and long-term
compensation for
those who put our
tax dollars in
jeopardy...
That's infinitely
preferable to what
the New York Times
reported today...
about how the new
salaries will be
doled out. And the
idea that there
could be any
year-long, upfront
guarantees for
investment bankers
or traders... that's
simply another
license to bring
down the house...
Again, risk-free pay
breeds the riskiest
behavior.
No matter what, the
idea that the
government is
Citigroup's biggest
owner but, as far as
I know, still had no
knowledge of the new
pay package plan,
until they probably
read it in The
Times, which may
give people as much
as they were getting
before the
breakdown... That
just smells bad...
Wall Street can't
afford any more
offending odors
right now.
The idea that
there's no
correlation between
that payback and
these salaries
increases... is
just, I mean... It's
just going to start
a whole new round of
acrimony, and cause
us to wonder if
Vikram Pandit, or
the board...
particularly the
Allen Belda run
compensation
committee, who also
happens to be the
man who I think ran
Alcoa into the
ground... has a
clue...
Oh, and memo to the
government...
Will you please stop
that spat between
Tim Geithner from
Treasury, and Sheila
Bair from the FDIC,
about the
stewardship of
Citigroup?... It's
bad enough that the
bank's the ward of
the state. The last
thing we need are
conflicting
regulators of the
darn thing. There's
not a lot of common
sense involved in
this story...
I had been thinking
lately that
Citigroup had a plan
to work closely with
the government... to
be open and fair,
and work hard to pay
the money back to
the feds. But now
I'm thinking the
opposite... and,
while I don't favor
a nationalization
plan, and I never
have... as I
disliked the results
when Lenin put one
in place after he
stormed the Winter
Palace... I do
believe that, right
now, immediately,
Belda should be
removed as the head
of the compensation
committee, and
replaced with the
toughest negotiator
that the government
has at its disposal.
How much would I
love that job?...
I've negotiated a
lot of salaries in
my time... I would
love that job. I
actually know how
they're paid on Wall
Street. We've got
taxpayers that have
the plurality of
votes... How about
we use it? And while
the government's at
it, I wouldn't keep
a single holdover
board member from
the previous regime.
They checked off on
this travesty...
they should be
broomed pronto.
Citigroup's an
outlier. Of all the
major banks, it took
on the most risk,
yet it had the least
controls. Its board
of directors was the
most absent of all
boards, including
Bank of America's...
and you know, that's
saying something.
And now Citi can't
seem to help itself.
Let's give them some
help right now... so
we won't have to be
surprised anymore
about their actions,
as their actions
after all have a
direct impact on us,
not just the
incredible 300,000
people who still
work there.
[verbatim recap]
[end of segment]
Read Jim's next Segment
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